A Strategy for Starting a Family Business
A Family Business Succession Strategy

Is franchising a smart strategy for a family interested in starting a business together?

Could a franchise business be part of the succession equation for a family business?

It can be, but there are also pitfalls that need to be recognized and avoided before an investment is made to purchase a franchise.

One of the questions frequently asked of our family business franchise expert by people considering a franchise business is how to choose a franchise that is best for them?

Answering that question is not as easy as it might sound!

According to the International Franchise Association, there are more than 2,500 franchise chains and more than 900,000 companies that offer or have bought franchises in the US. Many more, worldwide! 

How important to the US economy are franchising operations?  According to one source, only 8 per cent of retail businesses in the US are franchises but they are responsible for 40 per cent of all retail sales in the country. 

So when someone asks us about selecting a franchise that would be best for them, our response – research, research and research! 

Research the market for a particular product or service for which you have experience and a passion!  

Research the market potential of the franchise. “While it may sound rather rudimentary, regardless of all of the great things the franchisor may offer, rule #1 is to make sure there is an abundance of potential customers!” suggests family business strategy master Don Schwerzler.

Schwerzler has been studying and advising family business entrepreneurs for more than 40 years and an internationally recognized family business strategy master and the founder of the Atlanta-based Family Business Institute and their web organization, Family Business  

Research the costs, controls and restrictions imposed by the franchisor - they can be "deal breakers".

Another important consideration for a potential franchisee - what is your exit strategy? Will the business be sold or will it be transitioned to family? 

“It makes good sense to consult with other franchise owners, your banker, attorney, CPA and financial planner – don’t be afraid to share your research and to ask for their opinions and advice,” suggests Schwerzler.  

Research the Internet for information about the opportunities and pitfalls of buying a franchise. The FTC has an excellent franchise consumer guide worth checking out. 

Best of all – asking our Family Business Franchise Expert for help to make the best match! 


If you currently own and operate a franchise business and are having problems dealing with issues involving family business dynamics:

     Family Feuds & Disagreements

Alcohol and/or Drug Addiction



Family Business Expert

Leadership and Governance

Family Business Advisory Board

We Can Help!

 If you own a family business and are thinking about using the franchise concept to fund the growth and expansion of your family business brand – We Can Help!

 If you would like to complete a “profile” questionnaire to see if owning and operating a franchise business is right for you – We Can Help!

One trend we have been watching is where the parents are buying a franchise with/for their adult children to co-own and operate – sort of a “new nepotism”. A major problem, however, is that the family rarely considers the many potential issues and problems related to family business dynamics,” says Schwerzler.

As one client observed, “when everything is working well, being in business with your kids can be like heaven on earth – but nothing could be closer to hell on earth when there are problems…”

If the parents are involved in purchasing the franchise, a core question - will the kids be able to successfully operate the business should the parents die or become incapacitated?

Will the family members involved in the business be able to work well together?

Do the family members involved in the business have a written agreement in place that deals with compensation and other issues of potential conflict?

What problems can you anticipate if some of your children are working in the business and others are not – how will the parents who are involved in a franchise business deal with estate equalization?

What will happen if one or more of the children lose interest in the business? What happens if they want to work fewer hours than the business my require, or want to leave the business completely? How will the family deal with the consequences of divorce and/or alcohol& drug addiction related problems?

And lastly, make sure you have a good understanding of the conditions and restrictions that the franchisor may impose on the franchise owner regarding succession – transitioning the ownership from one generation of family to the next.




Family Business Experts
Family Values and Business Systems

Return from Franchising to
Family Business Experts Home Page

Share this page: What’s this?

SHARE THIS PAGE WITH FAMILY, FRIENDS & BUSINESS ASSOCIATES! Would you prefer to share this page with others by linking to it?Click on the HTML link code below.Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable. var l = window.location.href, d = document; document.write('<form action="#"><div style="text-align:center"><textarea cols="50" rows="2" onclick=";"><a href="'+l+'">'+d.title+'</a></textarea></div></form>');